Correlation Between Merck and Lizhi
Can any of the company-specific risk be diversified away by investing in both Merck and Lizhi at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Merck and Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merck Company and Lizhi Inc, you can compare the effects of market volatilities on Merck and Lizhi and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Merck with a short position of Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merck and Lizhi.
Diversification Opportunities for Merck and Lizhi
Very good diversification
The 3 months correlation between Merck and Lizhi is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Merck Company and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and Merck is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Merck Company are associated (or correlated) with Lizhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lizhi Inc has no effect on the direction of Merck i.e., Merck and Lizhi go up and down completely randomly.
Pair Corralation between Merck and Lizhi
If you would invest 80.00 in Lizhi Inc on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Lizhi Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Merck Company vs. Lizhi Inc
Performance |
| Timeline |
| Merck Company |
| Lizhi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Merck and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merck and Lizhi
The main advantage of trading using opposite Merck and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merck position performs unexpectedly, Lizhi can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lizhi will offset losses from the drop in Lizhi's long position.| Merck vs. Capricor Therapeutics | Merck vs. Soleno Therapeutics | Merck vs. Bio Path Holdings | Merck vs. Moleculin Biotech |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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